Question

During the month of July, Clanton Industries issued a check in the amount of $934 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should:

Answer 1

Answer: deduct the check amount from the bank balance

Explanation:

From the question, we are informed that during the month of July, Clanton Industries issued a check in the amount of $934 to a supplier on account but the check did not clear the bank during July.

Since we are told that the check did not clear the bank in July, when preparing the July 31 bank reconciliation, the company should make sure that the amount on the check is deducted from the balance of the bank.